The decision is St. Joseph Abbey v. Castille (5th Cir. Mar. 20, 2013), and it strikes down “rules issued by the Louisiana Board of Funeral Directors granting funeral homes an exclusive right to sell caskets.” The court concludes that “mere economic protection of a particular industry” is not “a legitimate governmental purpose,” and that the law is not rationally related to any other, more legitimate, purposes. On this, the court agrees with Craigmiles v. Giles (6th Cir. 2002) and disagrees with Powers v. Oklahoma (10th Cir. 2004). Here’s a quote that captures well the court’s reasoning (whether you agree with it or not):

The great deference due state economic regulation does not demand judicial blindness to the history of a challenged rule or the context of its adoption nor does it require courts to accept nonsensical explanations for regulation. The deference we owe expresses mighty principles of federalism and judicial roles. The principle we protect from the hand of the State today protects an equally vital core principle –- the taking of wealth and handing it to others when it comes not as economic protectionism in service of the public good but as “economic” protection of the rulemakers’ pockets.

Another big win for the Institute for Justice, which has shown a rare ability to win economic regulation cases on the grounds that the regulation lacks a “rational basis,” even though the rational basis test in economic liberty cases is usually extremely deferential to the government.